To my great surprise, Viceroy Chang approved of my first plan. I was authorized by cable to go over to London to negotiate the loan of $15,000,000.
The Chinese minister in London, a Li Hung Chang man, was advised of my mission, which in itself was a sufficient credential for me to present myself to the minister.
In less than a month after my arrival in London, I succeeded in negotiating the loan; but in order to furnish collaterals for it, I had to get the Chinese minister in London to cable the government for the hypothecation of the customs’ revenue.
I was told that Sir Robert Hart, inspector-general of customs, and Viceroy Li Hung Chang refused to have the customs’ revenue hypothecated, on the ground that this revenue was hardly enough to cover as collateral the loan to meet the heavy indemnity demanded by Japan.
The fact was: Viceroy Li Hung Chang and Chang Chi Tung were at loggerheads and opposed to each other in the conduct of the war. The latter was opposed to peace being negotiated by Li Hung Chang; but the former had the Dowager Empress on his side and was strenuous in his efforts for peace.
Hence Sir Robert Hart had to side with the Court party, and ignored Chang Chi Tung’s request for the loan of $15,000,000; on that account the loan fell through, and came near involving me in a suit with the London Banking Syndicate.
I returned to New York and cabled for further instructions from Chang Chi Tung as to what my next step would be. In reply he cabled for me to come to China at once.